Tuesday, January 7, 2014

Indian Laxmicoin Seeks Clarifications From Regulatory Authorities Before Its Launch

So far Bitcoins legal issues were vexing Bitcoin
community of India. Now the Indian version of
Bitcoins named Laxmicoin has felt the pressure of legal
uncertainty surrounding virtual currencies like Bitcoin
and Laxmicoin. This is more so after the Reserve Bank of India (RBI)
declared
that Bitcoins are vulnerable to various sorts of risks including
legal
risks.

According to Hindu,
Laxmicoin has adopted a cautious approach and has decided to with
till legal uncertainties are over. However, this may take
considerable time keeping in mind the slow pace at which regulatory
issues are resolved by India.

Many Bitcoins entrepreneurs have suspended their
operations till Indian regulatory authorities come up with a clear
cut regulatory framework. Those who are functioning are working with
the clear understanding that they can be prosecuted by Indian
regulatory authorities wherever they are found to be breaching Indian
laws. Laxmicoin has preferred the former approach that is more
conservative in nature.

According to posts on Laxmicoin’s Twitter page,
its launch has been delayed due to “regulatory clarifications”
and they hope to have clear guidelines from government soon. They
further said that they have written to authorities and are waiting
for their replies to avoid any “problems“.

Various operators are expecting clear regulatory
clarifications that virtual currencies are not illegal per se but
according to Perry4Law,
the leading techno legal ICT law firm of Asia, Bitcoins website
owners and entrepreneurs must
comply with Indian laws to stay legal. The virtual
currencies are saddled with number of significant financial, cyber
security and legal risks at the moment. The research paper titled
Cyber
Law Due Diligence in India and E-Commerce Businesses (PDF)
issued by Perry4Law has aptly described the cyber law due diligence
requirements that Bitcoin websites in India are required to follow.

There have been regular reports of cyber criminals
hacking and stealing virtual currencies across the world. More and
more legal violations are being reported these days. In the past
there have been many media
reports of the usage of Bitcoins for illicit
and illegal activities in several jurisdictions. Now it
has been reported that some Indian tea
traders violated Indian laws by engaging in illegal
Bitcoin transactions.

Further, different virtual currencies continue to
pop up almost every day, exposing users to unintended risks and
losses arising out of scams perpetrated by cyber criminals, cyber
security experts say. It is high time for Bitcoins entrepreneurs to
comply with Indian laws before indulging in Bitcoins dealings in nay
manner whatsoever.